Correlation Between EIDESVIK OFFSHORE and NIKKON HOLDINGS
Can any of the company-specific risk be diversified away by investing in both EIDESVIK OFFSHORE and NIKKON HOLDINGS at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining EIDESVIK OFFSHORE and NIKKON HOLDINGS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EIDESVIK OFFSHORE NK and NIKKON HOLDINGS TD, you can compare the effects of market volatilities on EIDESVIK OFFSHORE and NIKKON HOLDINGS and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in EIDESVIK OFFSHORE with a short position of NIKKON HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of EIDESVIK OFFSHORE and NIKKON HOLDINGS.
Diversification Opportunities for EIDESVIK OFFSHORE and NIKKON HOLDINGS
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EIDESVIK and NIKKON is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding EIDESVIK OFFSHORE NK and NIKKON HOLDINGS TD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIKKON HOLDINGS TD and EIDESVIK OFFSHORE is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on EIDESVIK OFFSHORE NK are associated (or correlated) with NIKKON HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIKKON HOLDINGS TD has no effect on the direction of EIDESVIK OFFSHORE i.e., EIDESVIK OFFSHORE and NIKKON HOLDINGS go up and down completely randomly.
Pair Corralation between EIDESVIK OFFSHORE and NIKKON HOLDINGS
Assuming the 90 days horizon EIDESVIK OFFSHORE is expected to generate 1.1 times less return on investment than NIKKON HOLDINGS. In addition to that, EIDESVIK OFFSHORE is 1.77 times more volatile than NIKKON HOLDINGS TD. It trades about 0.04 of its total potential returns per unit of risk. NIKKON HOLDINGS TD is currently generating about 0.08 per unit of volatility. If you would invest 930.00 in NIKKON HOLDINGS TD on September 14, 2024 and sell it today you would earn a total of 320.00 from holding NIKKON HOLDINGS TD or generate 34.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EIDESVIK OFFSHORE NK vs. NIKKON HOLDINGS TD
Performance |
| Timeline |
| EIDESVIK OFFSHORE |
| NIKKON HOLDINGS TD |
EIDESVIK OFFSHORE and NIKKON HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EIDESVIK OFFSHORE and NIKKON HOLDINGS
The main advantage of trading using opposite EIDESVIK OFFSHORE and NIKKON HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EIDESVIK OFFSHORE position performs unexpectedly, NIKKON HOLDINGS can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in NIKKON HOLDINGS will offset losses from the drop in NIKKON HOLDINGS's long position.| EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc | EIDESVIK OFFSHORE vs. Apple Inc |
| NIKKON HOLDINGS vs. Dalata Hotel Group | NIKKON HOLDINGS vs. Meli Hotels International | NIKKON HOLDINGS vs. NH HOTEL GROUP | NIKKON HOLDINGS vs. Boyd Gaming |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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